Advanced Search
MyIDEAS: Login

The effects of price regulation of pharmaceutical industry margins: A structural estimation for anti-ulcer drugs in France

Contents:

Author Info

  • Pierre Dubois;
  • Laura Lasio;

Abstract

The objective of this paper is to study the effects of price regulation on competition in the pharmaceutical industry. We provide a method allowing to identify margins in an oligopoly price competition game even when prices may not be freely chosen by Â…firms. We use our identiÂ…cation strategy to study the effects of regulatory constraints on prices in the pharmaceutical industry which is heavily regulated in particular in France. We use data from the US, Germany and France to identify country speciÂ…c demand models and then recover price cost margins under the regulated price setting constraints on the French market. To do so, we estimate a structural model on the market for anti-ulcer drugs in France that allows us to explore the drivers of demand, to identify whether regulation really affects margins and prices and to relate regulatory reforms to industry pricing equilibrium. We provide the fiÂ…rst structural estimation of price-cost margins on a regulated market with price constraints and show how to identify unknown possibly binding constraints thanks to three different markets (US, German and France) with varying regulatory constraints. The identiÂ…ed margins show that margins have increased over time in France but that fiÂ…rms were specially constrained in price setting after 2004.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.york.ac.uk/media/economics/documents/herc/wp/12_18.pdf
File Function: Main text
Download Restriction: no

Bibliographic Info

Paper provided by HEDG, c/o Department of Economics, University of York in its series Health, Econometrics and Data Group (HEDG) Working Papers with number 12/18.

as in new window
Length:
Date of creation: Jul 2012
Date of revision:
Handle: RePEc:yor:hectdg:12/18

Contact details of provider:
Postal: HEDG/HERC, Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom
Phone: (0)1904 323776
Fax: (0)1904 323759
Email:
Web page: http://www.york.ac.uk/economics/postgrad/herc/hedg/
More information through EDIRC

Related research

Keywords: empirical IO; regulation; price constraints; pharmacy; antiulcer drugs.;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Thomas Aronsson & Mats Bergman & Niklas Rudholm, 2001. "The Impact of Generic Drug Competition on Brand Name Market Shares – Evidence from Micro Data," Review of Industrial Organization, Springer, vol. 19(4), pages 423-433, December.
  2. Brekke, Kurt R. & Grasdal, Astrid L. & Holms, Tor Helge, 2009. "Regulation and pricing of pharmaceuticals: Reference pricing or price cap regulation?," European Economic Review, Elsevier, vol. 53(2), pages 170-185, February.
  3. Kurt R. Brekke & Tor Helge Holmås & Odd Rune Straume, 2008. "Regulation, generic competition and pharmaceutical prices: Theory and evidence from a natural experiment," NIPE Working Papers 01/2008, NIPE - Universidade do Minho.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:yor:hectdg:12/18. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Rawlings).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.